TMI Blog2017 (4) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... had set aside the adjudication order on the ground that it proceeded on the basis of the retracted statement of the persons who were not offered for cross examination. Appeal dismissed - decided against appellant. - CEAC No. 11 of 2016, CM Nos. 34509 of 2016 (delay) and 34508 of 2016 (for stay) - - - Dated:- 11-4-2017 - JUSTICE S.MURALIDHAR JUSTICE NAJMI WAZIRI For the Appellant: Mr Harpreet Singh, Sr. Standing Counsel with Ms. Namrata Bharti, Advocates For the Respondent: Mr. A.K. Prasad and Ms. Priyanka Goel, Advocates ORDER CM 34509/2016 (delay) 1. For the reasons stated therein, the delay of 4 days in re-filing of the appeal is condoned. 2. The application is allowed. CEAC 11/2016 CM 34508/2016 (for stay) 3. This is an appeal by the Commissioner of Central Excise, Delhi-II under Section 35G of the Central Excise Act, 1944 ( the CE Act‟) against the final order dated 15th January, 2016 passed by the Customs Excise Service Tax Appellant Tribunal ( CESTAT‟) allowing the appeal filed by the Respondent against an Order-in-Original dated 25th March, 2008 passed by the Commissioner of Central Excise. 4. The background ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of Mr Varun Gupta under Section 14 of the CE Act whether he (purportedly admitted to the manufacture of the aforementioned brands gutkha) and the fact that they were sold to Devakikrishna Traders, Hubli. In his further statement on 30th January, 2006, he is purported to have made some more admissions as regards the documents seized from the above traders at Hubli, and those seized from the premises of and Shri Avinash M Baliga, and the premises of M/s. Maruti Agency, Belgaon. 8. Mr Abhay Gupta, father of Mr Varun Gupta is stated to have given a separate statement on 7th October, 2004. Further statements were recorded of Mr Pawan M Prabhu proprietor of M/s Devakikrishna Traders, Hubli on 7th October and 14th December, 2014; of Mr Avinash M Baliga, proprietor of M/s Damodar Traders, Belgaum on 8th October, 2004 and 14th October, 2005; of Mr Suresh Rao, Proprietor of M/s Maruthi Agencies, Mangalore on 7th October, 2004 and 14th October, 2005; of Mr H.S. Sooryanarayan, the GPO holder of M/s Hostota on 14th March, 2006. It was noticed that during the course of investigation, the Respondent deposited a sum of ₹ 35 lacs with the Department. 9. It was concluded that a CE duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, it was not corroborated by any documentary evidence. Cross-examination was also sought of the panch witnesses Mr Shiv Kumar and Mr Md. Anwar as well as of Mr Rakesh Garg, IO, DGCEI, New Delhi. The above request was declined by the CCE by referring the decision in Jethmal Pithaji v. Assistant Collector of Customs, Bombay AIR 1974 SC 699 followed in Jagdish Shankar Trivedi v. Commissioner of Customs 2006(194) EL T 290. Reference was also made to the decision in Surjeet Singh Chhabra v. Union of India 1997 (89) ELT 646 (SC) where it was held that, not allowing of cross-examination was not violative of principles of natural justice even if such confession was retracted within six days. Reference was also made to the decision in Kanungo Co. v. Collector of Customs , Calcutta 1983 (13) ELT 1486 (SC). On the other hand, on behalf of the Respondent, reliance was placed on the decisions in Superintendent of Customs v. Banabhai Kalphabhai 1995(76) ELT 508 (SC) and Jagmohan Singh Sawhney v. Collector of Customs 1995(75) ELT 350 (Tri.- Delhi). 14. Accepting the case of the Department, the CCE justified the denial of cross examination of its witnesses. The CCE further held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant that the retracted statements of the aforesaid persons might require corroboration but not in material particulars. According to him, as long as the material available on record provided a general corroboration of the retracted statements, that would be sufficient to sustain the SCNs issued to the Respondent. Secondly, it was submitted that the retraction took place only when the cross-examination of the persons who gave statements in the course of investigation was denied and not earlier thereto. Therefore, the CCE was justified in ignoring such retraction. 20. On the other hand, Mr A.K. Prasad, learned counsel appearing for the Respondent pointed out that although the impugned order of the CESTAT in the Respondent's case has been appealed against, no appeal has been filed against the three other noticees on whom penalty was levied and whose appeals had been allowed by the CESTAT by the same common impugned order. In other words, the Department was being selective. Secondly, he pointed out that there was no justification in denying cross-examination of the persons who gave statements against the Respondent. It was a prerequisite of the principles of natural justice th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eded on the basis of the retracted statements of persons not offered for cross examination. There again, it was contended by the department that the retraction made beyond 20 months after the initial statement, would have no effect in the eyes of law. The Court negated the above statements and held as under: 41. What the above submission overlooks is the 'reliability' of such statements. Once it is shown that the maker of such statement has in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as much as it is about its 'reliability'. It is the latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some other reliable independent material. This is the approach adopted by the CESTAT and the Court finds it to be in consonance with the settled legal position in this regard. 24. Likewise, in its order dated 17th September, 2015 in CEAC 6/2013 ( Flevel International v. Commissioner of Central Excise ) dealing with a similar situat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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